The Festival is led by the digital and arts communities across Brighton to deliver a broad programme of conferences, exhibitions, installations, workshops, outdoor events and meet-ups alongside an education programme.
The funding will help deliver more digital art events and strong content throughout the month.
A number of commissions will be made available through the Grassroots Fund, which awards grants for projects that utilise and connect art with design and technology.
Cate Canniffe, Director, South East, Arts Council England, said:
"Brighton Digital Festival is a really important part of the arts and culture ecology in the South East and one that we are pleased to be able to support.
"It provides an important opportunity for organisations – such as Lighthouse, Brighton Museum and South East Dance – to showcase digital work and reinforce the critical link between arts and culture and the economic success that is such a feature of the creative industries."
The Arts Council funding, which totals £173,000 for the next two years, is designed to help grow and sustain the Festival through 2014 and 2015, enabling it to develop its reputation as a celebration of digital culture both at home and abroad.